A New Zealand court has ruled that the U.S. Government must hand over the evidence they have against Megaupload so Kim Dotcom and other employees can properly defend themselves against the pending extradition request. The U.S. refused to comply but Judge Harvey concluded that this would be unfair. He further noted that the entire U.S. case stands or falls on the strength of the alleged copyright infringement charges.

As widely reported, Megaupload founder Kim Dotcom and the rest of the “Mega Conspiracy” stand accused by the US Government of running a criminal operation.

Charges in the indictment include engaging in a racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering, and two substantive counts of criminal copyright infringement.

The prosecution is hoping to have the defendants extradited to the U.S., but following a ruling by New Zealand District Court Judge David Harvey today, this will prove to be more complicated than expected.

In an 81-page decision, Judge Harvey ruled on a request from Megaupload’s legal team for the U.S. Government to reveal what evidence they have on the defendants. In other words, Megaupload wants to see the extent to which the U.S. authorities can back up their criminal charges.

The U.S. Government objected to the request arguing that Megaupload doesn’t have the right to disclosure in the extradition process, but Judge Harvey disagreed.

He ordered the disclosure of all documents related to the alleged criminal acts, not just those in the possession of New Zealand police, but all files held by the FBI and other U.S. authorities as well.

Much of today’s ruling looks into procedural issues, but Judge Harvey also makes some interesting remarks on the way the U.S. is handling this case. He notes that if the U.S. has its way the extradition process would be merely “administrative”, as opposed to “judicial”. This would interfere with the rights of the accused, who according to Judge Harvey should have the right to review the evidence so they can argue against it.

“In my view there must be fairness and the hearing and balance must be struck, otherwise the record of case becomes dominant virtually to the exclusion of everything else and places the extradition process in danger of becoming an administrative one rather than judicial,” the verdict reads.

The Judge further grants disclosure of evidence related to all the criminal charges, and notes that the allegations of the U.S. Government are rather complex. For example, the authorities are applying civil copyright concepts in a criminal context. Furthermore, he notes that the copyright infringement changes are the cornerstone, in the sense that the money laundering, wire fraud and racketeering charges are all based on the alleged copyright infringements.

“There is a complex factual matrix and justiciable issues are complicated by the fact that the United States is attempting to utilize concepts from the civil copyright context as a basis for the application of criminal copyright liability which necessitates a consideration of principles such as the dual use of technology or what they described as significant non-infringing use,” Judge Harvey writes.

“The existence of criminal copyright charges is a keystone to providing the unlawful conduct element of the racketeering, money laundering and wire fraud charges.”

Judge Harvey concludes with an order for the US Government to hand over all documents related to the charges within 21 days.

This is a significant victory for Megaupload, and not only because they can now build a better defense against the extradition as well as any U.S trial. The comments made by Judge Harvey also suggest that without proper evidence of criminal copyright infringements against the accused, there’s not much left of the case. And as Kim Dotcom revealed earlier, this evidence might not be that strong.